NIFTY SET TO ACHIEVE 10700 TARGET; TRAIL STOP-LOSS TO 10590

NIFTY SET TO ACHIEVE 10700 TARGET; TRAIL STOP-LOSS TO 10590

WORLD MARKETS                             

US indices soared 0.7%-0.8% to hit record highs.

Dollar index fell 0.5% to 91.866 after producer price index declined 0.1% month-on-month in December, marking first fall in more than a year. Weakness in index was also attributed to stronger Euro which rose to $1.2059 from the $1.19 in the previous session following the release of European Central Bank minutes construed as hawkish.

Brent crude crossed $70 level before paring some gains to settle at $69.26 — its highest close in three years. U.S. crude rose 23 cents to settle at $63.80 per barrel.

In Europe, FTSE and Italy gained 0.2% and 0.6% respectively while DAX and CAC fell 0.6% and 0.3% respectively. Industrial production in the euro area jumped 1% in November.

AT HOME

Benchmark indices ended higher by a fifth of a percent to scale fresh record high on closing basis. Sensex added 70 points to settle at 34503 while Nifty finished at 10651, up 19 points. BSE mid-cap and small-cap indices gained 0.3% and 0.4% respectively. BSE Realty index soared 2%, becoming top gainer among sectoral indices, followed by 0.8% higher IT index. Energy, Oil & Gas and Consumer Durable indices were the top losers, down 0.3% each.

FIIs net sold stocks and index futures worth Rs 624 cr and 1186 cr respectively but net bought stock futures worth Rs 153 cr. DIIs were net buyers to the tune of Rs 770 cr.

Rupee depreciated 6 paise to end at 63.66/$.

TCS reported 1% q-o-q in dollar revenue at USD 4787 mn. Rupee revenue rose 1.2% to Rs 30904 cr. Net profit grew 1.3% to Rs 6531 cr. Constant currency revenue growth came in at 1.3%, which was lower than 1.7% growth in previous quarter but in-line with estimates.  Operating profit margin rose 1 bps to 25.2%. Volume growth at 1.6% was highest in three years.

Indusind Bank posted 25% y-o-y rise in December quarter net profit at Rs 936 cr. NII rose 20% to Rs 1895 cr. Gross NPA ratio rose 8 bps q-o-q to 1.16% and net NPA ratio rose 2 bps to 0.46%. Slippages however fell to Rs 408 cr from 498 cr sequentially.

OUTLOOK

Today morning, except 0.2% lower Nikkei, other Asian markets are trading with gains of upto 0.7% and SGX Nifty is suggesting about 40 points higher start for our market.

Just to reiterate, we have been working with targets of 10700 followed by 10950 after 10490 top made in early November was taken out. Nifty yesterday closed at 10651 and a gap up opening today would take it very close to 10700 target.

As mentioned above, after 10700, we would be gunning for 10950. Immediate support, after today's higher start, would have risen to 10590, with the stop-loss of which, trading longs should be held on to.

India's industrial production data for November would be released today and is expected to show a growth of 4.4%, up from previous month's 2.2% uptick. CPI for December would also be released and is expected at 5.1%, up from previous month's 4.88%.

Infosys will report its quarterly earnings today.